Production capacity based levy - Central Excise

Central Excise Act - Production capacity based levy [Section 3A]:

• ·         This is a new provision introduced through Finance Act, 2008 w.e.f 10.05.2008.
• ·         Applicable to certain goods notified by the central Government.

         Eg. Following goods manufactured with the aid of the packing machines and packed in pouches.

             -Unmanufactured tobacco brand.

             -Chewing Tobacco

• ·         Duty is payable on the basis of annual production capacity.
• ·         Duty payable shall be notified by the Central Government.
• ·         Duty is payable on a fixed monthly basis, whether produced/ removed or not.
• ·         Annual production capacity shall be determined by the Assistant/ Deputy commissioner.
• ·         Not applicable to goods manufactured on EOU.
• ·         The new provision is mandatory and not optional.
• ·         If the factory remains closed for a continuous period of 15 days or more, duty calculated shall be proportionately reduced.